Court-side Economics: Big Energy Group Serve Up Savings at The Queen’s Club

Background

The Queen's Club is a private sporting club in West Kensington, London. The club has 38 tennis courts and hosts the HSBC Championships annually. The club’s offering is compounded by prestigious entertainment and dining facilities, including a restaurant, bar, museum and an array of function rooms.  

The Queen’s Club came to Big Energy Group in search of a tailored energy solution. Recognising that commodity prices were becoming more volatile and non-commodity costs were steadily increasing, they wanted a trusted partner to work closely with them to help manage and mitigate both sides of their energy costs.

Challenge

The Queen’s Club had historically reviewed their energy arrangements towards the conclusion of their existing contracts. This approach had previously been effective, but the turbulence of the past few years (i.e. the pandemic, the energy crisis and prevailing geo-political instability) had led to a desire to plan ahead to manage risk and capitalise on market opportunities.

The ability to minimise wholesale price risk exposure through effective forecasting was central to the club’s aims, yet budget certainty was retained as an overarching objective due to its importance to the club. The Queen’s Club also advised they are reliant on membership income and required consistent energy rates so these costs could be accurately built into membership charges.  

Taking this into consideration, we proposed a forward procurement strategy underpinned by a fixed rate contract. This would enable the club to take a long-term view of wholesale prices and wait for the market to present an opportunity before contracting. It would additionally ensure an accurate forecast of energy costs, so these could be accurately apportioned and integrated into membership charges.

Solution

Rather than simply renewing their contracts based on wholesale prices at the point of expiry, our trade-desk analysed market forecasts and advised The Queen’s Club to lock-in a fixed price in February 2024 when prevailing wholesale prices were at their lowest since 2021. This approach led to wholesale market savings in comparison to contracting at the point of expiration.

At this point we ran a multi-supplier quotation exercise, allowing suppliers to compete against each other for The Queen’s Club’s supply contract. Using market reports for guidance, 24 month fully fixed contract options were selected for longer-term budget security and mitigation against anticipated future volatility.  

The Queen’s club secured contractual savings of £190,000 for electricity, against an original spend of £1,224,000 – almost a 16 per cent reduction compared to budget. Gas costs have additionally decreased by almost 12 per cent, with contractual savings of more than £18,000 compared to an original contractual spend of over £158,000.

Testimonial ‍

“When we started this journey with Big Energy, they quickly understood how we could work together to effectively reduce our energy and operating costs.”  
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- D. Dhanoa, Finance Director at The Queen's Club

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